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Judge: Sanction for Samsung's leak of Apple secrets is public shaming

January 30, 2014: 8:27 AM ET

That and legal costs are the price it pays for violating a U.S. federal court's protective order.

Samsung Chairman Lee Kun-hee

Samsung Chairman Lee Kun-hee

FORTUNE -- U.S. Magistrate Judge Paul Grewal was furious.

Details of a patent licensing deal between Apple (AAPL) and Nokia (NOK) that were turned over to Samsung's outside counsel with an agreement -- protected by court order -- that they would absolutely, positively never be seen by Samsung itself -- turned up in the hands of a Samsung licensing executive who told a shocked Nokia executive: "all information leaks."

"A casual observer might reasonably wonder," Judge Grewal wrote in October, "what magic a protective order works that allows outside counsel access to confidential information to advance the case without countenancing untoward uses by the client.

"The answer is not a magical one at all: confidential information remains confidential because counsel and clients alike follow court orders. If parties breach this basic rule, the court's assurances become meaningless."

Apple and Nokia had demanded tough sanctions against Samsung and its outside counsel, Quinn Emanuel. On Wednesday, Judge Grewel delivered his answer: His "public findings of wrongdoing" -- plus court costs -- would be "sufficient both to remedy Apple and Nokia's harm and to discourage similar conduct in the future."

To the judge, in his courtroom, a public finding of wrongdoing probably seems like a big deal. Outside the court, where most people live, his admonishment is likely to get lost.

So in the spirit of Judge Grewal's order -- to "discourage similar conduct in the future" -- I've reposted below a partial record of Samsung extra legal activities compiled in October from public documents by reader TeeJay2000.

  •  July 7, 2004: Jury advised of adverse interference when Samsung allowed emails to be automatically deleted even after it was told to retain relevant emails. After Samsung's appeal, Judge William Martini found "Samsung's actions go far beyond mere negligence, demonstrating knowing and intentional conduct."
  • October 17, 2005: The U.S. Department of Justice fined Samsung nearly $300M for memory price fixing within the U.S.
  • Feb. 7, 2007: U.S. government fined Samsung for $90M for memory chip price fixing for violations in 2006.
  • Jan.15, 2008: Samsung's offices in Korea were raided after evidence showed that a slush fund was used to bribe government officials and other business leaders.
  • July 16 2008, Samsung chairman, Lee Kun-he was found guilty in Seoul of financial wrongdoing and tax evasion. Despite prosecutor request of seven years in prison, sentence was reduced to three years followed by a pardon by the South Korean Government in 2009 to allow him to help with its successful bid to host the 2018 Winter Olympics. He is now a member of the International Olympic Committee and this 'pardoned criminal' returned as Samsung's Chairman in March 2010.
  • May 19, 2010: The EU Commission fined Samsung for being part of a cartel that shared confidential information and fixed memory chip prices (along with eight other firms).
  • Nov. 1, 2011: The Korean Fair Trade Commission fined Samsung for being part of a cartel that fixed prices and reduced output for TFT-LCD screens between 2001 and 2006.
  • March 15, 2012: The Korean Fair Trade Commission fined Samsung for a mobile phone price fixing scheme and consumer fraud whereby consumers would be paying more than what the discounted prices advertised.
  •  July 25, 2012: Magistrate Grewal informs the jury that they could take into account that "spoliation" of evidence occurred when Samsung destroyed evidence that could have been used in the Apple lawsuit; Samsung had a policy of automatically deleting emails that were two weeks old and should have suspended that policy between August 2010 (when Apple informed Samsung of patent infringement) and April 2011 (when Apple initiated the lawsuit).
  • August 24, 2012 a jury returned a verdict finding Samsung had willfully infringed on Apple's design and utility patents and had also diluted Apple's trade dresses related to the iPhone. But Samsung continues to fight the ruling, and continues in their copying behavior.
  • Dec 2012: EU issued a Statement of Objections (SO) against Samsung for abusing its Standard-Essential Patents in not providing FRAND rates. Samsung withdrew all SEP-based injunction requests against Apple in Europe days before the SO was issued, but to no avail.
  • April. 2013, Samsung is accused of and admits hiring people in several countries to falsify reports of HTC phones "constantly crashing" and posting fake benchmark reviews.
  • October 2013 Samsung in confirmed reports from independent and objective testing, found to be intentionally falsifying performance benchmarks of its flagship products: the Galaxy S4 and Note 3.

Thanks again to TeeJay2000 and to FOSS Patents' Florian Mueller, who has the text of the judge's order.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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